On Tax Day, the Lege Contemplate a Tax Break for Yacht Owners (Seriously)

Rep. John Davis' bill would cap the sales tax on boats costing over $250,000

Rep. John Davis' bill would cap the sales tax on boats costing over $250,000

Given all the pressing needs of the state, it’s good to know that our state lawmakers have time this session for an especially down-on-their-luck group. Not nursing home residents, not schoolkids, not state employees or the disabled. Nope, it’s yacht owners.

Yes, today a House committee discussed giving a tax break to wealthy yacht-buyers. Under House Bill 2187, by Rep. John Davis, a Houston Republican, the tax on sales of boats over $250,000 would be capped at $15,625. For a $20 million yacht, this would work out to a tax reduction of 99 percent. Those buying smaller, cheaper boats would continue to pay the current 6.25 percent sales tax.

Representatives of the yacht industry argued that the tax break is needed because Florida passed a similar law last year. Many rich Texans are now docking their boats in Florida or elsewhere to avoid paying sales tax here, taking jobs and spending on services with them, they argued to the House Committe on Ways and Means.

“I truly believe in my heart that Texas is a big boat territory but because we haven’t been progressive in our laws most of the buyers of large vessels have chosen other places to keep these boats,” said Jim Hedges of Lone Star Yacht Sales.

Some lawmakers on the committee seemed quite sympathetic

“It doesn’t take much to get over $250,000 anymore,” mused Rep. Lanham Lyne, a Republican from Wichita Falls.

Tension seemed to be building in the room as ordinary citizens happened to be waiting for other bills alongside the usual suspects. Finally, Rep. Mike Villarreal (D-San Antonio), arriving late to the committee, piped up.

“So this bill is a tax break for mega-yacht owners?,” he asked. “I feel like i just walked through the twilight zone. Is that what we’re talking about – a tax break for mega-yacht owners?”

The hapless yacht-booster at the dais certainly didn’t help his case when he parried, “This is not just for rich people. You can get used yachts as well.”

Laughter roiled the committee room.

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